Oil and gas find could help SA set up sovereign wealth fund, says Mantashe

Lew Skannen

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Minister of Mineral Resources Gwede Mantashe told the National Assembly that South Africa's recent oil and gas find had great potential to offer the country energy independence, economic growth and jobs.

Mantashe was addressing Members of Parliament during a plenary of oral replies to their questions on Wednesday afternoon.

Total announced during the 2019 Mining Indaba that it had found offshore gas deposits at its Brulpadda prospects in the Outeniqua basin, some 175km off the coast of South Africa.

In a statement in early February, Total said the Brulpadda well encountered 57 metres of net gas condensate pay in reservoirs, with the well reaching a final depth of 3 633 metres.

Mantashe told members that while more information still needed to emerge about the potential of the find for the South African economy, he was confident that it could reduce South Africa’s exposure to international oil price volatility.

"It is still early days to determine the full extent of this opportunity. However, there is a potential to reduce significantly the dependency on imports of oil and gas. It can also help us develop oil and gas sector into an independent and robust sector," said Mantshe.
https://www.fin24.com/Economy/oil-and-gas-find-could-help-sa-set-up-sovereign-wealth-fund-says-mantashe-20190314
 

Lew Skannen

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"Transformation is at the heart of everything we do. If you look at the shareholding of the team doing the exploration, only 10% belonged to South Africa. That is why I believe we can intervene in that space by creating a sovereign wealth fund to preserve the benefits of that discovery for future generations. There is nothing more transformative than that," he said.
... and here is the ANC already busy to find ways to loot again. If all else fails, they probably stand chance to be nationalized.
 

FNfal

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And the cart is before the horse .
If, could , but .
Politicians blowing hot air as usual.
 

Gordon_R

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Its pure BS. You can only have a sovereign wealth fund when the national government has a budget surplus and low debt.

This is unlikely anytime in the foreseeable future, given ever increasing population and social welfare spending.
 

R13...

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Does it make sense for us to have a sovereign wealth fund? Shouldn't we stabalise Eskom and then spend on infrastructure and industrialisation?
A sovereign wealth fund can be used to fund the latter suggestions of your post. Not that I'd trust the ANC with a fund like that. They have a similar fund in the PIC and they've been using it as a piggy bank
 

Lew Skannen

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And the cart is before the horse .
If, could , but .
Politicians blowing hot air as usual.
This is not hot air. That I can assure you. If you have 50 ministers, presidents and vice presidents all sitting somewhere looking at ways to steal money for themselves and their families and friends, then something like this may well become a reality, especially in SA where the economy is busy collapsing and loot becoming harder to find.
 

flippakitten

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Someone should explain to Mantashe a sovereign wealth fund doesn't mean his personal offshore accounts.

Money would be much better spent in reducing taxes, pumping money into NHI, Free higher education, infrastructure, schools, service delivery etc...

On another note, all of a sudden America have a reason to come deliver some democracies.
Oil + Gold with a racist regime in power... Sound familiar to anyone else?
 

krycor

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I trust the Norwegians to do something like this.

I do not trust the ANC with looking after a bag of Doritos. They'll eat the whole damn thing.
In theory this is what every country should do vs natural resources.. that and investment of such money should be strictly on a profit basis.

BUT

As you point out over the last decade we have eaten through +25-30% debt simply because of the fraud, corruption and wastage of state funds. The answer is obvious though but ALL political parties refuse to place limits on presidential/governance powers. Should tell you a lot about political parties in SA.
 

ɹǝuuᴉM

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At what depth are those fields? Is it viable to start extraction at the current oil prices?
 

Gordon_R

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At what depth are those fields? Is it viable to start extraction at the current oil prices?
Nobody knows for sure, which is why this whole thing is BS. They have only drilled one hole, and you cannot characterise a large oil/gas field based on a single point.

Either way, the start-up costs will be enormous, and it will require major investment (foreign capital). It also brings all kinds of regulatory and economic risks (BEE, environmental impacts, taxation, exchange rates, etc).

It could be a great success, or nothing might happen because of interminable delays...
 

Vrotappel

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A national loot fund. Most probably have a permanent hard on thinking about it.
 

Techne

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Refined oil, of we can produce enough, is pretty much a sovereign wealth fund. Problem is, as soon as we do make enough then Uncle Sam will come and "fix" our Human Rights, WMD and terrorist "problems".
 
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